Waterdrop Inc. (WDH) Subject Of Class Action Lawsuit

Waterdrop Inc. (WDH) is the subject of a class action lawsuit, filed on behalf of shareholders, regarding alleged violations of the federal securities laws.

If you have investment losses with Waterdrop Inc. (WDH), please contact Silver Law Group at (800) 975-4345 or at ssilver@silverlaw.com. The deadline to apply to be lead plaintiff (class representative) is November 15, 2021.

Waterdrop is a Chinese company founded in 2016 that operates medical crowdfunding platforms and provides online insurance brokerage services. The company is backed by Chinese tech conglomerate Tencent, which is a minority owner.

Initial Public Offering

Waterdrop held its initial public offering (IPO) in May, 2021 selling 30 million shares at $12 per share. Representatives for the underwriters were Goldman Sachs (Asia), Morgan Stanley, and BofA Securities.

On June 17, 2021, Waterdrop reported financial results for the quarter closed before the IPO that stated that the company’s operating costs and expenses had increased to $205.1 million and that the company had an operating loss for the quarter of $70.3 million, which was four times higher than the same quarter the prior year.

On August 11, 2021, it was reported that the China Banking and Insurance Regulatory Commission told insurance companies to stop improper marketing and pricing practices and better protect user privacy. Bloomberg reported that regulators had taken steps to stop some operations, including platforms run by Waterdrop.

On September 8, 2021, Waterdrop announced that operating losses for the quarter that ended June 30, 2021 had increased to $126.3 million compared to a profit for the same period in 2020.

On September 13, 2021, the share price dropped to $3, which was 75% lower than the IPO price.

The class action complaint alleges that Waterdrop made materially misleading and false statements about their business and prospects, including that they:

Earned a substantial part of their past revenue growth from illicit practices that were not in accordance with Chinese insurance industry rules.
Had been ordered by the Chinese government to shut down their mutual aid platform due to not complying with Chinese law.
Were under investigation by the authorities for violating Chinese law.

Due to the above, among other causes, it is alleged that Waterdrop’s representations in its registration statements regarding past financial data and operations were materially false and misleading and did not correctly reflect the business and its operations

Recover Waterdrop Inc. (WDH) Investment Losses

Silver Law Group is a nationally-recognized law firm representing victims of securities and investment fraud. Our attorneys represent investors nationwide and internationally in class action lawsuits against issuers in state and federal court and in arbitration claims in cases of stockbroker misconduct.

Scott Silver, Silver Law Group’s managing partner, is the chairman of the Securities and Financial Fraud Group of the American Association of Justice. Contact us for a no-cost consultation at ssilver@silverlaw.com or call (800) 975-4345.